Many home sellers suspect that agents make significant profits off the advertising that sellers pay for when selling their home.  In fact, you could be forgiven for feeling that some agents treat sellers more like the buyers of advertising than the sellers of a home!  With large newspaper advertising being so expensive, sellers have been craving a more efficient way of marketing that doesn’t require them to pay the excessive upfront advertising costs to an agent.

Enter the Internet.  Great!  It’s cost effective, wide reaching, and relatively low cost for the agents to use, so the agents won’t need to charge the sellers the large upfront advertising fees, right?  Wrong.

Many agents charge you $800 to $1,000 upfront to place your property on the internet (say $900).  What’s worse, many agents use the internet to turn a huge profit – at the seller’s expense. 

Here’s how it works:

Agents pay a fee of approx $900 per month to subscribe to real estate websites.  This subscription fee allows the agency to list as many properties on the website as they want.

If a typical real estate agency lists 10 homes for sale per month, and they charge each of the 10 sellers for internet marketing, the agency has pocketed a total of $9,000 for the month.

Now remember, the agency pays only $900 per month and they can list as many properties on the websites as they want.  So the real estate agency has now made $8,100 profit off these 10 sellers without having to sell a single property!  That’s an agency profit of $97,200 per year.

img_double-dipping2So when an agent tells you they have to charge you for internet marketing, ask:

How many sellers have you passed your internet subscription fee onto this month? And how much profit have you made because of this?’

or say:

I think you’ve made enough profit off your one subscription fee this month, don’t you?”

The best agents will treat you like the seller of a home, not the buyer of advertising.  These agents will recommend Professional Marketing for your property (including extensive internet exposure across all major websites) and they’ll say:  “It’s complimentary & all part of the service”.